GST/HST on shipping?

[coins4sale4u]

Hi, I recently registered for a GST/HST number and starting Jan 01, 2016 I need to charge and remit GST/HST.

Does anyone know if I need to charge GST/HST on top of my Shipping Fees or just on the Final Value Fees?

Some sellers seem to charge GST/HST just on the item price and others also charge GST/HST on the shipping fees as well...

Thanks in advance!

Chris

[pierrelebel · Accepted solution]

Yes, as a registered vendor, you must remit GST/HST on shipping and handling for all sales of taxable goods within Canada.

The method of shipping does not matter.

Since you live in Alberta, if you ship to Ontario (for example) by mail, Canada Post will either charge you 5% GST or 13% HST depending on the service you use. (5% GST on regular parcel or 13% HST on XpressPost or Priority)

While you are entitled to Input Tax Credits (ITCs) on the exact amount of tax you have paid, it has noting to do with the amount you need to charge/remit your client in Ontario.

When shipping taxable goods (some of your products may be non-taxable) to Ontario, 13% HST applies on the products and the shipping and handling charge.

"Some sellers seem to charge GST/HST just on the item price"

Those sellers are wrong (or ill informed) and will have to remit GST/HST on the shipping and handling charge, based on the rate.in effect for the province of the buyer.

[coins4sale4u]

Thank you Pierre for your detailed response! I really appreciate it.

Chris

[fatdane]

Please note that on shipments outside Canada, there is no GST/HST, and it follows that there would be no GST/HST on shipping fees on  shipments going OUTSIDE Canada. The Government Gobbldygook term is that it is a zero rated sale. Inside Canada there is GST/HST on shipping fees and the system has been cleverly designed on shipments to other Provinces to confuse and perplex mere mortals.

Some postal clerks are eager to collect GST/HST on shipments outside Canada, but if they pay attention to their computer the GST/HST should be removed on parcels. If  you are buying stamps, and the total value of stamps for putting on letters and parcels is over $5, and you put the stamps on the letters/parcels at the wicket, then there is no GST/HST. Many postal clerks are not aware of this.

If most of your business involves sales outside of Canada, and you buy most of your stock in Canada, you will probably end up getting money back from the Government, albeit very slowly.

[coins4sale4u]

Thank you for this. I was aware that no GST/HST would be charged/remitted on sales outside of Canada but wasn't aware about the rest. I think I should look into this some more...

[valuestore]

Scenario, 5000 gross sales in Canada (includes shipping) , 20000 gross outside Canada(includes shipping), total gross sales 30000. Is it mandatory to register for gst, collect gst on the 5000 Canadian sales.

[reallynicestamps]

ZOMBIE THREAD FROM 2015

The problem with zombie threads is that the information may be out of date or inaccurate.

@pierrelebel   retired a few years ago and in any case financial and taxation rules change fairly often.

[recped]

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@valuestore wrote:
Scenario, 5000 gross sales in Canada (includes shipping) , 20000 gross outside Canada(includes shipping), total gross sales 30000. Is it mandatory to register for gst, collect gst on the 5000 Canadian sales.

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The $30,000 gross sales requirement to register for GST applies to worldwide sales not just taxable sales.

There is a slight problem with your math because 20,000 + 5,000 does not equal 30,000.

[cumos55]

That $30,000 amount includes the price of the item sold..... plus .....  shipping.

The buyer pays a total... and then it is the seller that buys postage.

The rules for GST/HSTT have changes several times over the last few years. 

That makes this discussion a MESS!!

[valuestore]

With June 15 approaching, I thought it a relevant thread to revive... Oops your right, i meant to say 25+5

[kh-leslie]

Hello Everyone,

Due to the age of the thread, it has been closed to further replies.  Please feel free to start a new thread if you wish to continue to discuss this topic.

Thanks for understanding!